Current · Source: Reserve Bank of India · RBI/2013-14/562 · issued 10 Apr 2014 · ~1 min read
Quick answerRBI has extended the existing all-in-cost ceiling for trade credits for imports until June 30, 2014. No other changes to trade credit policy have been made. Banks must continue to apply the same cost limits and inform customers.
The rule, in the simplest words
The maximum interest rate and fees (all‑in‑cost ceiling) for trade credits to import goods stay the same until 30 June 2014.
No other parts of the trade credit policy have changed; banks keep using the same rules they used before.
Banks must continue to apply the same cost limits and inform their customers that the ceiling is unchanged.
After 30 June 2014 the RBI will review the ceiling again and may adjust it.
This rule applies to Category‑I Authorized Dealer banks, importers who use trade credits, and corporate customers who get import financing.
How it plays out — a real example
A trade‑credit officer named Rohan in Mumbai’s corporate banking wing helps a textile importer. He explains that the interest rate on the import credit is capped at the same level as before, so the importer can plan the payment schedule without worrying about higher costs. Rohan reminds the importer that the ceiling will be reviewed after June 30, 2014.
What changed
The all-in-cost ceiling for trade credits for imports, previously set under a September 2012 circular, was due for review. RBI has now decided to keep that ceiling unchanged and applicable until June 30, 2014, after which it will be reviewed again. No other aspects of the trade credit policy have been altered.
What it means for you
For banks and importers, this means the maximum interest rate and fees on trade credits remain at the same level as before. There is no immediate relief or tightening of borrowing costs for import financing. Banks should continue to ensure that all trade credit transactions comply with the existing cost ceiling and advise their customers accordingly.
What you must do
Continue applying the existing all-in-cost ceiling for trade credits as per the September 2012 circular until June 30, 2014.
Inform your constituents and customers about the extension of the current ceiling.
Monitor any future RBI review after June 30, 2014, for potential changes.
What is the all-in-cost ceiling for trade credits?
The all-in-cost ceiling is the maximum interest rate and fees that can be charged on trade credits for imports. This circular confirms that the existing ceiling remains in place until June 30, 2014.
Does this circular change any other trade credit rules?
No. All other aspects of the trade credit policy remain unchanged. Only the validity of the all-in-cost ceiling has been extended.
What should banks do with this circular?
Banks must bring the contents to the notice of their customers and ensure compliance with the existing cost ceiling until the next review.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/562
A.P. (DIR Series) Circular No.122
April 10, 2014
To
All Category – I Authorised Dealer Banks
Madam / Sir,
Trade Credits for Imports into India – Review of all-in-cost ceiling
Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to the A.P. (DIR Series) Circular No. 56 dated September 30, 2013 relating to all-in-cost ceiling of Trade Credits for imports into India.
2. On a review it has been decided that the all-in-cost ceiling as specified under paragraph 4 of A.P. (DIR Series) Circular No.28 dated September 11, 2012 will continue to be applicable till June 30, 2014 and is subject to review thereafter.
3. All other aspects of Trade Credit policy remain unchanged. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.
4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully
(Rudra Narayan Kar)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/562 · issued 10 Apr 2014. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Category-I Authorised Dealer Banks, Importers using trade credits, Corporate customers availing import financing), your first concrete step on “Trade Credit Cost Ceiling Extended Till June 2014” is: “Continue applying the existing all-in-cost ceiling for trade credits as per the September 2012 circular until June 30, 2014.” (RBI issued this 10 Apr 2014).
Circular: RBI/2013-14/562 -- Trade Credit Cost Ceiling Extended Till June 2014
Issued: 10 Apr 2014
Action required: Continue applying the existing all-in-cost ceiling for trade credits as per the September 2012 circular until June 30, 2014.
Action required: Inform your constituents and customers about the extension of the current ceiling.
Action required: Monitor any future RBI review after June 30, 2014, for potential changes.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8834&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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